The sky-high prices may seem to run counter to the conventional wisdom that the larger the prospective buyer pool, the larger the chances of attracting multiple bids and driving up the price. But at the upper reaches of the luxury market, off-market deals typically command a premium even a bidding war couldn’t top because ultra-wealthy homebuyers will pay top dollar for one amenity that no amount of market comps or construction can buy: exclusivity.
Once rare, in an age in which privacy is perhaps the biggest luxury, off-market sales are on the rise among the wealthiest buyers and sellers of U.S. real estate. “I am seeing more of these off-market deals in the past six months than I’ve seen in my career,” says Christophe Choo, a Los Angeles-area luxury broker with Coldwell Banker Previews International. “It’s unusual, particularly given the strength of the market and the lack of inventory.“Off-market” generally refers to a home that’s being sold without being listed on the Multiple Listing Services. Property information circulates among a connected network of realtors and their vetted high-end clientele. In some cases, the sellers of these homes never initially intended to sell them, or, if they did, did so unofficially, quietly floating the property’s availability among a small, contained network of contacts.
By Morgan Brennan, Feb. 15, 2013 Forbes